Credence Attributes’ Valuation and Price Dispersion: Quantile Regression vs. Stochastic Frontier – an Application to Health Claims in Yogurts

Alessandro Bonanno, Marco Costanigro (), Francesco Bimbo, Alfons Oude Lansink () and Rosaria VIscecchia

No 170585, 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota from Agricultural and Applied Economics Association

Abstract: Food manufacturers use health claims to signal higher product quality and attract health oriented consumers. However, consumers’ willingness to pay for health-related attributes may not be large enough to repay firms of the high costs associated with developing, certifying, and marketing such products. We investigate the impact of several health-related credence attributes on product’s price, and what may help manufacturers to reach consumers with the highest willingness to pay for yogurt. To achieve our goals we use a large database of yogurt sales in Italy and two empirical approaches recently introduced in the hedonic price literature: Quantile Regression (QR) and Stochastic Frontier Analysis (SFA). Results show that the implicit prices of health claims differ across price levels (i.e. quantiles), and that manufacturers differ in their ability to target consumers with high willingness to pay.

Keywords: Agribusiness; Demand and Price Analysis; Marketing (search for similar items in EconPapers)
Date: 2014
New Economics Papers: this item is included in nep-agr, nep-com, nep-eff and nep-mkt
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea14:170585

DOI: 10.22004/ag.econ.170585

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